Government must focus on collecting taxes from small miners - COMP

MANILA, Philippines - The government must focus on collecting taxes from small-scale miners who are not giving their share to the state first, before raising the amount large-scale miners have to remit, the Chamber of Mines of the Philippines (COMP) said.

“Plug the loopholes and then get back to us,” Rocky Dimaculangan, COMP vice president for communications, told reporters late last week.

By plugging loopholes, he said, the government must collect taxes from small-scale miners first.

He noted that the government has been unable to collect taxes from many small-scale miners.

Mines and Geosciences Bureau director Leo Jasareno said earlier that while small-scale mining accounts for more than 60 percent of the country’s gold production, most of the small-scale operations are illegal and do not pay taxes.

The government is planning to release a policy statement on mining and a series of policies for the regulation of the industry.

Jasareno said that among the proposed reforms for the regulation of the mining industry is to increase the share of the government by raising taxes from mining operations.

The government, however, has yet to come up with a mechanism on how to increase its share from mining.

The COMP has said earlier that large-scale miners are already giving its fair share to the government.

The COMP noted that it has been paying an average of P10 billion worth of taxes per year since 2007.

The COMP said that in 2010, the industry’s total payments in terms of taxes, royalties and fees amounted to nearly P14 billion.

With the government keen on increasing its share from mining, Dimaculangan said the COMP is also consulting its members on what model of revenue-sharing with the government they would be willing to support.

He said that while the COMP is still consulting members on revenue-sharing schemes, they are proposing to the government that they be allowed to directly remit to the local government their share in revenues so that local government units (LGU) may appreciate the benefits of mining.

“Right now, companies are required to pay excise tax to National Government and National Government budgets it and then gives it to the LGU in the form of IRA (internal revenue allotment) after about four years so they (LGUs) don’t really see the value of mining,” he said.